Nikkei falls after 2-day rally, BOJ awaited; Toyota underperforms

* Index-heavy Fast Retailing and SoftBank together take off
hefty points from Nikkei
* Toyota falls on report citing lower forecast in 2015
* BOJ expected to stand pat on policy
* News that Islamic State threatens Japanese captives keeps
market on edge
By Ayai Tomisawa
TOKYO, Jan 21 (Reuters) - Japan's Nikkei share average fell
on Wednesday as investors pocketed gains from the sharp rises in
the past two sessions, but expectations that the European
Central Bank will unveil stimulus measures this week limited
losses.
The market was also awaiting a policy decision by the Bank
Of Japan likely around midday. The central bank is expected to
continue its massive asset buying programme while possibly
expanding two expiring loan schemes to support bank lending.
The Nikkei fell 0.6 percent to 17,263.18 points by
mid-morning, after gaining 2.1 percent on Tuesday. In the past
two sessions, it had gained 2.4 percent.
Index-heavy Fast Retailing Co and SoftBank Corp
fell 0.7 percent and 1.2 percent, respectively, and the
companies together took off a hefty 23 points off from the
Nikkei, or roughly a quarter of its losses.
"Yesterday's rally was more so of a surprise than today's
correction overall. Markets are currently in limbo right now as
there aren't much domestic catalysts," said a senior trader at a
foreign brokerage.
He said that the market may remain in a range between the
current level and an intraday high of 16,533 marked on Oct. 31,
when the BOJ unexpectedly ramped up its buying spree.
"Until 18,000, that's the range you're just going to be
playing with for the time being," he said.
Meanwhile, news that the militant group Islamic State
released an online video on Tuesday purporting to show two
Japanese captives also kept the market on edge.
Toyota Motor Corp fell 1.7 percent after the Nikkei
business daily said the automaker expects to sell fewer cars and
trucks in 2015 and will likely lose it position as the world's
top-selling automaker to Volkswagen for the first time.
Toyota expects to sell roughly 10.15 million vehicles
worldwide this year, a decrease of about 100,000 from last year,
with the Nikkei citing company forecasts due out Wednesday.
Other exporters were steady while the dollar traded at
118.44 yen, moving away from a one-month trough of 115.85
set recently.
Canon Inc added 1.2 percent, Honda Motor Co
gained 0.2 percent and Tokyo Electron Ltd
edged up 0.1 percent.
The broader Topix slipped 0.5 percent to 1,390.63
and the JPX-Nikkei Index 400 shed 0.5 percent to
12,642.83.
(Editing by Kim Coghill)